FTC Calls on Congress to Pass Consumer Privacy Laws

In its final report, the agency urged companies to police themselves, but said government intervention is also needed.

The Federal Trade Commission is putting pressure on both Congress and tech companies to take actions to protect user privacy and give them more information on how their personal data is collected and used.

In its final report, released March 26, the FTC takes aim at vendors whose mobile devices, apps and services collect the personal information of users in the name of giving those users more of what they want. However, the federal agency said it shouldn t come at a greater cost to those users.

"In today s world of smartphones, smart grids, and smart cars, companies are collecting, storing, and sharing more information about consumers than ever before," the FTC said in its report. "Although companies use this information to innovate and deliver better products and services to consumers, they should not do so at the expense of consumer privacy."

The FTC s report comes at a time of heightened debate around the issue of user privacy. Large Internet companies like Google and Facebook are coming under fire from users and legislators alike for the amount of personal data they collect, which is then used to help advertisers personalize the ads they send to users.

Apple and Google also have both been criticized for allowing iPhones and Android smartphones to share personal information--including photos and contacts--with mobile apps that are downloaded onto the devices.

Some in the government already have been pushing for greater privacy rights for users. Sen. Charles Schumer, D-N.Y., has been a vocal critic over the past few years, and earlier this month asked the FTC to look into the most recent issues surrounding Apple and Google and the data-stealing apps. "These uses go well beyond what a reasonable user understands himself to be consenting to when he allows an app to access data on the phone for purposes of the app's functionality," Schumer said in a letter to the FTC.

In late February, the Obama administration released a proposed bill of rights designed to protect consumer privacy online, including enabling users to easily tell Internet companies with a single click whether they want their online activity tracked. It also called for limits on the amount of personal data online companies can collect and retain, and for consumers to be able to access and verify the data.

In its report, "Protecting Consumer Privacy in the Era of Rapid Change: A Proposed Framework for Businesses and Policymakers," the FTC wants the industry to develop policies and practices that err on the side of caution when dealing with consumer privacy. However, the commissioners are not relying solely on the good intentions of vendors, calling on Congress to enact general privacy legislation as well as laws around data security and breach notification.

They also urged lawmakers to pass laws concerning data brokers, who buy and consolidate consumer information.

"If companies adopt our final recommendations for best practices--and many of them already have--they will be able to innovate and deliver creative new services that consumers can enjoy without sacrificing their privacy," FTC Chairman Jon Leibowitz said in a statement. "We are confident that consumers will have an easy to use and effective Do Not Track option by the end of the year because companies are moving forward expeditiously to make it happen and because lawmakers will want to enact legislation if they don't."

The commissioners laid out several recommendations for companies to follow, including building consumer privacy into every step they take as they develop products and services. This privacy by design approach would include putting in reasonable security for consumer data, limiting the data that could be collected and retained, and developing policies to ensure data accuracy.

They also want businesses to offer both consumer and businesses the ability to decide what personal information is shared and with whom. This would include a do-not-track mechanism, the FTC said. In addition, companies need to be clearer about how they collect and use consumer data, and enable users to access that data.